Uganda Today: World Bank U-Turn: Global Lender Lifts Loan Ban on Uganda Despite Harsh Anti-LGBTQ Law
Kampala, Uganda – In a controversial reversal of its 2023 stance, the World Bank has lifted its ban on extending loans to Uganda, a decision that has reignited global debate about human rights, conditional aid, and the evolving nature of international finance.
The World Bank suspended new public financing to Uganda in August 2023 after the East African nation enacted one of the world’s most punitive anti-LGBTQ laws. The Anti-Homosexuality Act, passed in May that year, includes provisions for life imprisonment and the death penalty for certain same-sex acts — a move that drew sharp condemnation from Western governments, human rights organisations, and civil society groups.
The decision to resume financing comes despite the fact that the law remains in force and reports of ongoing human rights violations persist. Uganda’s Human Rights Awareness and Promotion Forum (HRAPF) reports that since the enactment of the law, hundreds of LGBTQ individuals have been evicted, assaulted, or arbitrarily arrested, triggering fears of deepening marginalisation and state-sanctioned abuse.
In a statement issued on Friday, the World Bank said it is “confident that new mitigation measures” will ensure that its funding “does not cause harm or discriminate against LGBTQ individuals.” The institution did not specify the nature of these mitigation mechanisms, but noted that they are designed to improve oversight, strengthen community safeguards, and promote inclusive development.
“Our commitment is to deliver development in a way that respects human dignity and protects all people from discrimination,” the statement reads. “We believe that we can achieve this through targeted project design, transparent implementation, and stronger third-party monitoring.”
Uganda’s Government Unfazed by Rights Criticism
Ugandan officials have largely downplayed concerns over the law’s human rights implications, often framing it as a reflection of national values and cultural sovereignty. President Yoweri Museveni has repeatedly defended the legislation as necessary to “protect Ugandan children and family structures.”
In response to the World Bank’s initial funding freeze, Uganda pivoted toward alternative financing sources, including increased bilateral cooperation with China and resource-backed loan models. However, the return of the World Bank — Uganda’s single largest multilateral lender — is expected to bolster a range of development programs in infrastructure, health, and education, many of which had stalled due to the loan freeze.
Civil Society Responds with Dismay
Human rights defenders, however, are alarmed by the World Bank’s reversal.
“This is a betrayal,” said Adrian Jjuuko, Executive Director of HRAPF. “Nothing has changed on the ground. LGBTQ Ugandans continue to live in fear. Lifting the ban without demanding meaningful reform sends the message that discrimination can be overlooked in the name of development.”
International watchdogs also warn that the decision could set a dangerous precedent for other nations with poor human rights records, effectively eroding the World Bank’s leverage on rights-based conditionality.
A Complex Balancing Act
Analysts suggest the World Bank’s move reflects a growing dilemma for global lenders: how to maintain engagement in countries with repressive laws without directly enabling the abuse of marginalized populations.
“Cutting off funding may punish governments, but it also risks harming the poorest citizens who rely on donor-supported services,” said a Kampala-based development economist. “This middle path — funding with safeguards — is a compromise, but it’s far from ideal.”
Looking Ahead
The decision marks a new chapter in the fraught relationship between Uganda and international financial institutions. Whether the new mitigation strategies will genuinely protect LGBTQ people — or merely provide political cover for the World Bank’s strategic interests — remains to be seen.
For now, Uganda stands to benefit from renewed funding, even as its human rights record continues to draw intense scrutiny on the global stage.
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